Abstract
Why are exchange rates more volatile than the nominal price level? Does the foreign debt increase or decline with national income? This chapter intends to give a theoretical answer to these two questions of international and monetary economic theory. The model setup in which these questions are treated is a standard representative agent utilitarian model, allowing for long-run growth due to constant returns to scale with respect to reproducible factors.
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© 1999 Martin Zagler
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Zagler, M. (1999). Foreign Indebtedness, Inflation and Exchange Rate Overshooting. In: Endogenous Growth, Market Failures and Economic Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-27129-0_6
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DOI: https://doi.org/10.1007/978-1-349-27129-0_6
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-27131-3
Online ISBN: 978-1-349-27129-0
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)